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of <h1>Court Invalidates Covenant in Sale-Deed; Rule Against Perpetuities Applied</h1> <h3>Dinkarrao Ganpatrao Kothare Versus Narayan V. Mandlik</h3> The court held that the covenant in the sale-deed of 1878 was a valid personal contract but did not create any rights in rem affecting the plaintiffs' ... - Issues Involved:1. Jurisdiction to grant a declaratory decree in an Originating Summons.2. Interpretation of covenants in the sale-deed of 1878.3. Validity of the covenant as a personal contract.4. Whether the covenant creates rights in rem.5. Applicability of the rule against perpetuities.6. Whether the covenant creates an interest in immovable property.7. Application of Hindu and English law principles.Detailed Analysis:1. Jurisdiction to grant a declaratory decree in an Originating Summons:The court examined whether it had the jurisdiction to grant a declaratory decree in an Originating Summons. The jurisdiction of the court to grant declaratory decrees is determined by Section 42 of the Specific Relief Act. It was concluded that the High Court Rule 214 allows the court to pass a declaratory decree in an Originating Summons provided the case falls within the provisions of Section 42 of the Specific Relief Act. The court found that the plaintiffs were entitled to ask for a declaratory decree.2. Interpretation of covenants in the sale-deed of 1878:The court had to ascertain the meaning of the covenants in the sale-deed of 1878. The covenants purported to reserve certain rights of pre-emption for the vendor, his heirs, Vahivatdars, and donees. The court emphasized that the words of the document should be construed according to their plain grammatical meaning. The court concluded that the covenant was a valid personal contract but did not create any rights in rem.3. Validity of the covenant as a personal contract:The court held that the covenant in the sale-deed of 1878 was a valid personal contract. However, it did not create any rights in rem affecting the plaintiffs' title. The court noted that although the covenant was a personal contract, the plaintiffs could not get a declaration as to rights under a personal contract.4. Whether the covenant creates rights in rem:The court concluded that the covenant did not create any rights in rem affecting the plaintiffs' title to the land and building. The court declared that the covenant in the sale-deed of 1878 did not create any rights in rem affecting the plaintiffs' title.5. Applicability of the rule against perpetuities:The court examined whether the covenant was void under the rule against perpetuities. The court noted that according to English law, such covenants would create an executory interest in immovable property, which would be void as offending against the rule of perpetuity. However, under Hindu law, neither equitable interests nor executory interests in immovable property are recognized. The court concluded that the covenant was void as infringing the rule against perpetuities.6. Whether the covenant creates an interest in immovable property:The court analyzed whether the covenant created an interest in immovable property. Under Section 54 of the Transfer of Property Act, contracts for the sale of land do not create an interest in the land. The court held that the covenant did not create an interest in immovable property but was a personal contract enforceable under certain circumstances.7. Application of Hindu and English law principles:The court discussed the application of Hindu and English law principles to the covenant. Under Hindu law, which governed the parties to the sale-deed, neither equitable interests nor executory interests in immovable property are recognized. The court referred to various case laws and concluded that the covenant was void as it infringed the rule against perpetuities.Conclusion:The court declared that the covenant in the sale-deed of 1878 did not create any rights in rem affecting the plaintiffs' title to the land and building. The covenant was held to be a valid personal contract but void as it infringed the rule against perpetuities. The plaintiffs were entitled to a declaration to that effect, and the appellants were awarded the costs of the appeal.
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